California / News and Insight on Business in the Golden State | HEARD ON THE BEAT / RETAILING

Customer Input

Build-to-Order PC Retailer Seeks a Niche

Waad Nadhir was ahead of the curve in 1995 when he launched CarChoice, two huge dealerships in Dallas and Detroit stocked with an unusually broad range of used cars and trucks.

His innovative business attracted AutoNation creator Wayne Huizenga, who bought CarChoice in 1996 for $103 million--more than double the $50 million Nadhir said he invested in the business. Nadhir hopes to score again with his latest enterprise: Inca Computer Co., a small retail chain that sells custom-built computers. The 10-store chain has recently opened five stores in Los Angeles and Orange counties.

But this time Nadhir is behind the curve. Better-known computer retailers such as Comp-USA and mail-order giants Dell Computer and Gateway are already in the build-to-order business. And literally hundreds of independent "screwdriver shops" build highly customized computers.

Detroit-based Inca thinks it can carve out business for itself by combining the quick service of the "screwdriver shops" with the consistency consumers expect from big chain stores.

"Southern California is a difficult market because it's a high-technology center with consumers who are very astute buyers of computer products," Nadhir said. "But we think sophisticated computer buyers will like our retailing concept."

So far, Inca customers have been mostly small-business owners who need advice about service and equipment and more experienced computer users who want upgrades. Nadhir would not disclose sales figures for the company, which opened its first store in November.

Inca says quick service is its advantage. Unlike most big retailers, Inca employees can assemble a customized Inca brand computer--one with varying memory specifications, sound and video capacities and keyboard and monitor configurations--while the customer waits, the company said.

Simpler customizations can be done in as little as 30 minutes, Inca said. Consumers with more extensive demands--modifications to the hard drive, for example--have to arrange pickup or delivery on a different date.

"Inca's advantage is the ability to provide instant gratification to those who want their computer right away," said Mark Harrington, editor of Computer Retail Week, a New York-based trade publication that recently named Inca Independent Retailer of the Year. "On the other hand, Inca is a new company, and it's learning the ins and outs of computer retailing. The other two players are well-established companies with solid customer bases."

Nadhir, a 42-year-old entrepreneur, has made a career of building mid-size businesses and selling them--mostly to Huizenga. Before opening CarChoice, he sold video chains in Detroit and New York to Blockbuster Video, Huizenga's previous enterprise.

Nadhir said he has no plans to sell Inca.

"We found a better format for delivering [computers] to the consumer," he said. "I'm involved in this for the long haul."

Besides filling orders, Inca is trying to differentiate itself by performing repairs and diagnostic evaluations for consumers with equipment malfunctions or upgrade needs. It will also create Web sites for customers. However, to attract employees who can build Web sites and perform other technical tasks, Inca must pay higher salaries than its competitors, said Seymour Merrin of Merrin Information Services, a Palo Alto-based computer trends research firm.

If Inca is to be competitive, it must offset those higher costs with higher sales volume, Merrin said.

"Inca will have an uphill battle in Southern California," Merrin said.